VA Qualified, Good Score, Denied, Advice?

[IvDogg]

Hello all, I'm hoping I could get some advice on working towards a Mortgage Loan.  So far I've been denied by one via AUS and another manual underwriter has approved me for a fairly low amount considering my income.

My middle score is currently 671 (was 679, but an innacuracy literally just appeared this past weekend).  My gross income is $117k/year, I am an active duty Army Officer of almost 14 years.  Monthly debt is $891 if you include my student loans which are currently on deferment, $770 if not.  On payday my cash assets would show $12k, ($7k savings, $5k checking).  I'm searching for a Singla Family Home in Hawaii, would like to spend no more than $3k/month P&I, tax and insurance.

Here's the negatives on my credit report that I feel are holding me back (starting from the worst):

- Shortsale closed 9/2011, it's inaccurate on EX, but prior to 9/2011 it's showing 43 - 90+ days late, 4 - 60 days late, 1 - 30 days late.  On EQ it's almost accurate as 8 - 90 days late, 2 - 60, 2 - 30, but shows my payment status as 120+ days past due (in dispute).  It's scheduled to disappear from my EX by the end of May.  Then off my EQ by the end of July.  Is this too much of a roadblock for me to get approved now?  How about after it gets removed from EX and my 40+ late marks go away?  Or do I really need to wait till it's completely gone in July?

- Auto Loan, open, currently paid on time, prior lates:  5 - 30 day lates within the past 2 years - 11/2013, 10/2013, 7/2013, 11/2012, 8/2012, 1 - 60 day late 10/2011, 5 - 30 days lates older than 2 years.

- Auto Loan, 1 - 30 day late 5/2011, inaccurately shows current status as "30 days past due" on TU and "Not more than two payments past due" on EQ both are in dispute.  Are the inaccurate payment statuses significantly hurting my score?  Should I wait until these are corrected before applying for a mortgage?

- Closed credit card:  2- 60 days past due 12/2012, 1/2012, 2 - 30 days past due 11/2012, 8/2012, 8 - 30 days past due older than 2 years.

- Closed credit card:  60 days past due 12/2012, 2 -30 days past due 11/2012, 8/2012.

- Closed Credit card:  30 days past due 3/2008

- Closed credit card:  60 days past due 6/2011, 2 - 30 days past due 2/2013, 11/2012, 3 - 30 days past due older than 2 years.

Positives:

- 5 revolving accounts with total limit of $4800, less than 20% utilization, should receive a $1000 limite increase by 6/10/2014.  Will the increase make enough of a difference to be worth the wait?

- Oldest open account 6/2011.

- Oldest account 8/2003.

- 6 positive installments accounts, 2 open.

- No judgements/BKs, collections or COs.

Thanks in advance for any and all feedback.

[ShanetheMortgageMan]

If you got approved via manually underwriting then I don't see why they wouldn't approve you for a $3k/mo payment - that'd put your DTI at about 39% (with the $891/mo of debt payments).  Did they say why they only approved you for a lower amount than that?

Short sale is far enough in the past it'd be a non-issue.  Since you were late on the mortgage leading up to the short sale VA has a 2-year waiting period requirement, but you are past that.  Why so many recent lates on that auto loan though?  Looks like it's on time for a couple months, then goes late, then on time, then goes late, etc.  Not like there was one distinct time that there was credit troubles and you recovered.  That is very likely the reason you weren't able to get an automated underwriting approval, and would be worrisome to underwriters unless there was a really good explanation.  The credit card lates in 2012 are also contributing.  Were you deployed during that time?  The credit limit increase won't have much of an impact on your ability to qualify, although it may bump you up a few points.

[IvDogg]

Sorry, let me clarify on the manual underwriter's approval.  As mentioned, I'm currently active duty, previously I was a Federal Employee.  I intend on staying on active status, but only came back in for 1 year, my extension won't be in effect till somewhere around July this year.  The manual underwriter said he needed guarenteed (backed up with documentation) income for 12+ months after closing which I just cannot provide, there's no way for me to get my orders early...  In my opinion, how can anyone truely guarentee they'll have a job 12 months after closing.  Anyways, so he based my debt to income on my Federal Employee income that is required to hold my position for up to 5 years while I'm on active military status, that being $97k/year.

It seems like though my short sale is in the past, all the late marks prior to close are still hurting me.  Do you think it will make a huge difference if I wait till May when it comes off my credit report?

The recent late payments were a result of me being a federal employee last year, reduced income due to sequestration, furloughs, and government shutdown (this is why I went back on active duty).  I was actually surprised to see those late marks on my report as I contacted the lender at the time to let them know about the situation and they gladly granted me an extension on my due date and waived the late fees.  A few of those lates were actually while I was away for military training and failed to make proper arrangements to get my credit cards paid on time.  I'm pissed at myself because two of those 60 day late payments were for $10 - $25 minimum payments.  I did note this in a lenghthy letter to the underwriter backed by military orders and copies of my online statements showing minimum payments of just those small amounts.

[babyeyes00]

As a fellow military member, I can feel your pain.  I had to do some explaining about my credit report.  I had the same situation:  I was a federal employee with a less than desirable salary then went active duty.  I think its the fact that lenders dont quite understand that or at least that was my issue when I applied with a lender.  Good luck to you and I hope that you find a home soon

[IvDogg]

Thanks for the positive words...  So far I've decided to wait about 2 months...  I should have the discrepancies of my report by then, the shortsale should age itself off my report, and it'll add 2 mores months distance from any negative items....  Hopefully this will make my file look a little better...

In the meantime I still welcome any advice from my fellow forum members.

[fishbjc]

I'm curious.....if the s/s was from 2011, it takes 7 years to age off...that would be 2018.  This year is only 3 years, did something change? 

[IvDogg]

As crazy as this is going to sound, DoFD was 7/2007!  I was going back and fourth with National City/PNC for over three years trying to get a simple loan modification.  After a year of working with them they sent us the new loan modification docs, but my wife's name was completely jacked up so the notary wouldn't accept it.  Had to start back off at step one of the loan modification process!  I deployed for my 2nd & 3rd time from 10/2008 to 4/2010, since I was covered under SCRA protections from 7/2008 - 2/2011 you would think they would be more willing to strike a deal on the modification since they couldn't foreclose...  During this whole time I had 2 more kids and that 2 bedroom townhouse was too small for my family of 6 so we cut our losses with the s/s.  I've been calling almost everyday hoping to get lucky with EQ and EX on an early removal.  EX said the earliest they would delete is May, EQ isn't budging, firmly holding to July.  I plan on calling once a day until I get lucky or May/July comes around =) .

[Asailorshort]

IvDogg, I'm not sure how it works for officers, but  have you tried going to your PSD/finance office/S2(?) office ?  They may be able to put something on letterhead for you that states you will be extending service for x years in July, upon receipt of your orders.  And/or is there a way to put your future assignment on your statement of service?

[IvDogg]

So I found a new lender who openned a ticket with Fannie Mae/Freddie Mac to tell him why my CR was being denied....

It was due to 5-6 old dispute marks on my CR...

Did my own research and it seems this has been a known issue for the past 3 years....  Do LOs not know about this?  Or is it the LOs I've worked with not experienced?